Netcare group revenue up 17.3%

Group revenue was up 17.3 per cent to 15.4 million rand for the six months ended March 31 2014 from 13.1 million rand in the previous comparative year.

Group adjusted Headline Earnings per Share were also up 19.5 per cent to 75.9 cents from 63.5 cents in the previous year.

Netcare’s interim dividend per share was up 18.5 per cent to 32 cents.

“Revenue grew in both the South Africa and United Kingdom operations in their respective local currencies, with group revenue up 17.3 per cent to 15.4 million rand. Currency conversion accounted for 11.2 per cent or 1.4 million rand of this increase,” Netcare said in a statement.

[DATA NTC:Netcare] operates the largest private hospital network, primary care network and emergency service in South Africa. The holding company is also the largest acute care hospital provider United Kingdom.

Normalised earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 17.2 per cent to 3.2 million rand from 2.7 million rand in 2013, before recognising 1.2 million rand from 703 million rand in2013 in rent paid to the GHG Property Businesses.

Net financial expenses were significantly lower, at 183 million rand compared to 390 million rand in the prior period.

“Normalised profit before tax of R1.3 million rand was 17 per cent higher from 1.1 million rand in 2013. Group tax of 393 million rand equates to an effective tax rate of 29.3 per cent, compared to the normalised effective tax rate of 20.4 per cent in the prior period, which favourably benefited from a non-recurring UK tax credit of 103 million rand,” Netcare explained.

Normalised profit after tax grew by 3.9 per cent to 949 million rand from 913 million rand in the previous comparative period.

Revenue for Netcare’s South Africa division grew 7.5 per cent to 7.7 million rand from7.2 million rand. EBITDA rose 14 per cent to 1.6 million rand from 1.4 million rand. Cash generated from operations was 44.3 per cent higher at R1.1 million rand from 822 million rand in the previous year.

In the hospitals and emergency services division, revenue grew 9.5 per cent to 7.2 million rand from 6.5 million rand in 2013, and EBITDA increased by 14.3 per cent to 1.6 million rand from 1.4 million rand.

Revenue for the United Kingdom division grew 4.4 per cent to 446.8 million pounds from 428.1 million pounds in the previous year. The division however suffered significant costs due to the CC Investigation into the private healthcare market, which amounted to 4.9 million pounds for the period under review from 1.7 million pounds in the previous comparative period.

“The demand for private healthcare within SA is expected to remain strong. The business will continue to drive clinical excellence and maintain its operational efficiency programmes,” said Netcare.

“In the UK, economic data indicates that the economy is starting to recover. However, central London remains distinct from the rest of the country, with the recovery currently less evident in other areas.”